Lawmakers Hear Report On NW Economic Outlook

Friday, January 18, 2002

By Rob Moritz
Arkansas News Bureau

LITTLE ROCK -- If the unprecedented economic and population growth of Northwest Arkansas is to continue, the area will need money for infrastructure and a better-trained work force, lawmakers were told Thursday.

Uvalde Lindsey with the Northwest Arkansas Council said a study found that "our anchor industries, the Wal-Marts and Tysons, contributed 75 percent of the growth of Northwest Arkansas in the last 20 years, but we have a pressing need to improve our work force skills. The jobs of tomorrow have skills that are different than today."

The populations of Benton County, which grew more than 57 percent in the 1990s, and Washington County, with a 39 percent growth rate, are expected to grow a combined 57 percent to about 500,000 by 2020, he said. The state's population went up just 13.7 percent in the 1990s.

To accommodate that expected growth, Lindsey estimated the state will need to spend more than $2 billion in the next 18 years on roads and sewer improvements.

The study, which compared the economy of Benton and Washington counties with cities of similar size, including Knoxville, Tenn.; Austin, Texas, and Huntsville, Ala., showed that economic growth over the last 10 years in the cities outpaced the two-county region. The study noted that high tech, high-growth industries had located in the cities over the period.

Wages in Benton and Washington counties, while above average for the state, have fallen well behind the cities, according to the study.

While unemployment in Northwest Arkansas is almost nonexistent -- most of the jobs being in manufacturing, retail and poultry -- the study found that few people in that region work in better paying high-growth technology industries, which have thrived in cities like Knoxville, Austin and Huntsville.

"We found that our employment in high-tech industries went down as a percentage of our labor force from 1980 to 1999," he said.

To help the region continue to prosper and grow, the state will have to pony up money to bring high-growth industries to the area and the rest of the state, he said, adding the Legislature also might consider incentives, such as tax breaks, to companies that move here.

He praised the Legislature for passing the Arkansas Venture Capital Fund last year, but described it as "a first step." That fund was created to increase state government's ability to attract businesses to the state. The fund will combine many existing economic development programs into a single incentive program.

He said more private venture capital groups must be willing to invest in new startup companies.

Lindsey said he knew of two small high-tech companies that left Arkansas for Virginia because of the availability of venture capital.

The state also needs to take advantage of its universities by promoting their research.

"Such research, when commercialized, will lead to the formation of new, high technology companies and the creation of high skill, higher paying jobs," he said.

He also suggested that the limited resources and incentives could be refocused to encourage the development of research in specific fields, such as high-density electronics, lasers and biomedicine.

The $300,000 study examined virtually every aspect of economic growth in North Arkansas and was done by a consulting team of several firms. It was financed by the council and with a grant from the Northwest Arkansas Community Foundation in concert with the Walton Family Foundation.

As far as high-tech training, Lindsey praised the new technology program available at the University of Arkansas at Little Rock, and said the council has begun working with schools in Washington and Benton counties to develop courses that will train students for high-tech jobs.

"We must work diligently with our secondary schools to build career paths," he said, adding that 75 percent of all high school students enter the work force, while "we direct all our efforts into the 25 percent that go to college."

Also to improve the region's image nationally, he said a regional marketing plan is being developed. It will include a Web site and printed materials focusing on the area.